GBPUSD runs into key resistance as BoE rate hike looms

GBPUSD pokes a 10-month-old descending resistance line as the Cable bulls brace for the Bank of England (BoE) updates. Given the pair’s successful trading above the key DMAs and a clear rebound from the 61.8% Fibonacci retracement of the May-September 2022 downturn, the buyers are likely to overcome the stated trend line resistance, currently around 1.2340. The same, if backed by the hawkish BoE updates, could allow the buyers to cross the multiple hurdles near the 1.2445-50 region. Following that, the May 2022 peak surrounding 1.2665 could gain the market’s attention.

On the flip side, the 50-DMA and the 200-DMA restrict short-term GBPUSD downside near 1.2140 and 1.1900 respectively. Also acting as immediate support is the 1.2000 psychological magnet, as well as the 61.8% Fibonacci retracement level of 1.1775. In a case where the Cable bears keep the reins past 1.1775, joined by the BoE’s disappointment, tops marked in September and October of the last year, around 1.1735 and 1.1645 in that order, could act as intermediate halts during a likely fall towards the 50% Fibonacci retracement level around 1.1500.

To sum up, GBPUSD is likely to rise further and has a price-positive technical set-up but the upside momentum needs validation from the BoE.